Daily Tax Update - July 26, 2010

GEITHNER SUPPORTS LETTING TAX CUTS FOR WEALTHY EXPIRE: In interviews yesterday, Treasury Secretary Timothy Geithner said that he supports letting the Bush tax cuts expire for individuals making more than $200,000 a year (and families making more than $250,000), and renewing the tax cuts for middle income Americans. Geithner said, “Again, we are proposing to make sure we're extending tax cuts that go to 95 percent of Americans. We extend a bunch of tax incentives to businesses to help encourage hiring, investment. We think those are sensible, affordable steps. We can, we can afford to do that now. But we have to make some choices, too, and we have to make sure we can continue to earn confidence around the world that we're going to have the will as a country to bring these large inherited deficits down over time to a much more manageable level.” Geithner added, “But I'll say what the president believes, and I believe this, is the right thing for the country, the fair thing, the responsible thing for the country now is to make sure we leave in place and preserve tax cuts that go to more than 95 percent of working Americans and complement those with a set of incentives for businesses to expand and hire. To make that possible, and to do that responsibly, I think it is fair and good policy to allow those tax cuts that only go to 2 to 3 percent of the highest earners in the country to expire as scheduled. The country can withstand that. The economy can withstand that. I think it's good policy.”

  • When asked if he would like for the capital gains tax to stay at 20 percent, Geithner replied, “I would ... And, and we don't want to see the rate of dividends exceed that either because, again, we want to make sure we have policies in place overall across the economy that's going to make sure we're encouraging investment, encouraging growth as this economy recovers.”
  • In another interview yesterday on the subject of letting the tax cuts expire for wealthy individuals, Geithner said, “What the president's proposing to do is to leave in place, to extend tax cuts that go to more than 95 percent of working Americans and to leave in place tax cuts that are very important to [incentivize] businesses to hire new employees and to invest in expanding output. We think it's a very strong package. We think it's the right package. We think it's fair. We think it's responsible.” Geithner added, “I do not believe it will have a negative effect on growth.”

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